Philippine economy seen to perform faster in 2nd semester Private investments to be key growth driver, says BSP By: Michelle V. Remo Philippine Daily Inquirer The Bangko Sentral ng Pilipinas (BSP) expects the economy to expand even faster in the second half, with private investments driving up growth.According to the BSP, sustained increase in investments by the private sector, together with the usual robust consumption of households, will help accelerate growth of the economy in the second semester. In the first quarter, the economy, measured in terms of gross domestic product, grew by 4.9 percent. Most projections point to a slightly faster growth in the second quarter. But for the third and fourth quarters, the central bank said growth could be even faster, allowing it to maintain its 5- to 6-percent full-year growth target. “Business process outsourcing continues to be a promising employer. In addition, capital formation [through private investments] has really bounced back in the last few quarters,” BSP Deputy Governor Diwa Guinigundo said, expecting the trend to continue. Capital formation, which grew by 37.6 percent in the first quarter, has been registering double-digit annual growth rates since last year, coming from low, single-digit rates the previous years. Economists said this was due to renewed activity in the manufacturing sector. Also, optimism on the country’s growth prospects over the medium term has been bringing in investments, they added. Remittances are likewise seen to be significant, supporting consumption of goods and services, the BSP official said. Guinigundo said the previous goal of between 7 to 8 percent economy growth could still be attained perhaps next year. He said production capacity has already expanded, thanks to investments over the past quarters. As a result, the economy has the potential to sustain a faster rate of growth once capacity is fully utilized. The Aquino administration originally set a growth target of 7 to 8 percent for this year. However, the economic team was forced to scale down its growth forecast of 5 to 6 percent due to adverse developments abroad, such as the natural disasters in Japan and the political unrest in the Middle East and North Africa. The disasters in Japan could dampen that country’s demand for Philippine goods, while mounting strife in key oil-producing regions recently pushed global oil prices higher. “Growth of 7 percent to 8 percent is still possible. The robust growth rate [of 7.6 percent] we experienced last year was not an aberration. The economy’s capacity to grow has really gone up,” Guinigundo said. |
| Stocks face jobs report test NEW YORK (CNNMoney) -- Stocks are in for a major reality check this week, with the jobs report for June on tap for Friday.Stronger-than-expected manufacturing data helped stocks log the best weekly gains in two years last week. But stocks had been mired in a slump throughout May and June, as a series of economic reports showed the economy was not growing as fast as investors hoped. June's employment report will be especially crucial as investors seek a fresh snapshot of the nation's employment picture, said Tim Ghriskey, chief investment officer at Solaris Asset Management. Weekly unemployment filings, which serve as a real-time indicator for the job market, have come in above the critical 400,000 level for the past 12 weeks. That prolonged weakness has dampened hopes for June's report. Economists surveyed by CNNMoney expect the economy added 120,000 jobs last month. Typically, the economy needs to add about 150,000 just to keep pace with population growth. The unemployment rate is forecast to fall only slightly to 9%, from 9.1% in the prior month. "The May jobs report indicated that hiring was slowing, and we're hoping for a bounce, but employment numbers don't tend to turn on a dime like that," Ghriskey said. "Markets will be waiting for Friday's report to see what happened in the labor market last month." Prior to May's disappointing increase of just 54,000 jobs, payrolls rose by more than 200,000 for three consecutive months. Investors will also be on the lookout for companies to make so-called pre-announcements ahead of second-quarter earnings season. The season gets unofficially underway July 11, when Dow component Aloca (AA, Fortune 500) reports results. Ahead of that semi-official start, companies are aiming to temper looming bad news, by warning that profits and revenues may be lower than initial expectations. "The economic recovery has weakened, and companies might remind investors that the spike in commodity prices will be making its way through the balance sheets," Ghriskey said. "That kind of news can drag on markets, especially after last week's run." On the docket Monday: All financial markets are closed for the celebration of Independence Day. Tuesday: Factory orders are due from the Commerce Department after the start of trading. Orders are forecast to have risen 1% in May, after falling 1.2% April. Wednesday: Before the opening bell, outplacement firm Challenger, Gray & Christmas will issue its report on planned job cuts for June. The Institute for Supply Management will put out its June services index after trading beings. Economists are looking for the ISM services index to fall to 54.0 from 54.6 in May. Thursday: The government's weekly jobless benefits report comes out before the start of trading, with 425,000 Americans expected to file new claims for unemployment, after 428,000 were filed in the previous week. Separately, a report from payroll services firm ADP is expected to show that employers in the private sector added 60,000 workers in June, after boosting payrolls by 38,000 in the previous month. Friday: The government will release its highly-anticipated monthly jobs report before the opening bell. Employers are expected to have added 150,000 jobs in June, after adding 54,000 jobs in May. The unemployment rate is expected to slip to 9.0%, from 9.1% in May. May wholesale inventory figures are due shortly after the opening bell. Late in the afternoon, the Federal Reserve will release its May consumer credit report. |
Oil Rises in New York, Extending Weekly Gain, on Greece Loan, U.S. Economy Oil rose in New York, extending last week’s 4.2 percent rally, after Europe authorized a loan payout for Greece, easing speculation the country’s debt crisis will derail the region’s economic recovery.Futures gained as much as 0.4 percent after European finance ministers authorized an 8.7 billion-euro ($12.6 billion) loan payout to Greece July 2. Crude trimmed losses on July 1 after U.S. manufacturing unexpectedly increased. Exxon Mobil Corp. reduced production at its refinery in Billings, Montana, and shut a pipeline after oil spill. Crude for August delivery rose as much as 36 cents to $95.30 in electronic trading on the New York Mercantile Exchange and was at $95.16 at 9:16 a.m. Sydney time. The contract fell 48 cents, or 0.5 percent, to $94.94 on July 1, the first decline in four days. Prices are 32 percent higher the past year. Brent oil for August settlement was at $111.90 a barrel, up 13 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract traded at a premium of $16.67 to New York-traded West Texas Intermediate. The spread reached a record $22.29 a barrel on June 15. The Institute for Supply Management’s factory index rose to 55.3 from 53.5 in May, the Tempe, Arizona-based group said July 1. Economists projected a decrease to 52, according to the median forecast in a Bloomberg News survey. Figures greater than 50 signal expansion. An Exxon team is investigating the cause of the spill that started late July 1, Exxon Mobil Pipeline Co. President Gary Pruessing said July 3. It leaked as much as 1,000 barrels of heavy crude into the Yellowstone River. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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